Fatty acids (FAs) are known to be important regulators of insulin secretion from pancreatic β-cells. FA-coenzyme A esters have been shown to directly stimulate the secretion process, whereas long-term exposure of β-cells to FAs compromises glucose-stimulated insulin secretion (GSIS) by mechanisms unknown to date. It has been speculated that some of these long-term effects are mediated by members of the peroxisome proliferator-activated receptor (PPAR) family via an induction of uncoupling protein-2 (UCP2). In this study we show that adenoviral coexpression of PPARα and retinoid X receptor α (RXRα) in INS-1E β-cells synergistically and in a dose- and ligand-dependent manner increases the expression of known PPARα target genes and enhances FA uptake and β-oxidation. In contrast, ectopic expression of PPARγ/RXRα increases FA uptake and deposition as triacylglycerides. Although the expression of PPARα/RXRα leads to the induction of UCP2 mRNA and protein, this is not accompanied by reduced hyperpolarization of the mitochondrial membrane, indicating that under these conditions, increased UCP2 expression is insufficient for dissipation of the mitochondrial proton gradient. Importantly, whereas expression of PPARγ/RXRα attenuates GSIS, the expression of PPARα/RXRα potentiates GSIS in rat islets and INS-1E cells without affecting the mitochondrial membrane potential. These results show a strong subtype specificity of the two PPAR subtypes α and γ on lipid partitioning and insulin secretion when systematically compared in a β-cell context.